CH Energy buyout by Fortis Inc. needs just one more approval

POUGHKEEPSIE, N.Y. -- CH Energy Group, the parent company of Central Hudson Gas & Electric Corp., says all hurdles except one have been cleared in its effort to be bought by Fortis Inc.

CH Energy hopes the final needed approval, from the state Public Service Commission, will come in the first quarter of 2013.

CH said in a press release issued Tuesday that the period for formal opposition to be filed under the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976 has passed.

"That (law) has to do with any antitrust issue that may result from the acquisition, and because nothing has been raised, no antitrust issues are of any concern in regards to this acquisition," said CH Energy spokesman John Maserjian. "So the next step now is for approval by the New York state Public Service Commission."

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CH Energy reported in July that approvals for the deal had been secured from the Federal Energy Regulatory Commission and the Committee on Foreign Investment in the United States.

Fortis, based in Canada, proposed a $1.5 billion buyout of Poughkeepsie-based CH Energy in February, and CH Energy shareholders approved the deal in June. CH Energy said at the time that 92 percent of the voting shares and 69.2 percent of eligible shares favored the sale.

The proposed buyout calls for CH stockholders to be paid $65 per share. CH's closing price Tuesday on the New York Stock Exchange was $65.42 per share.

Maserjian said the absence of strong opposition to the proposed takeover comes as no surprise to CH Energy Hudson and Fortis officials and that issues raised by the state are being addressed..

"From our perspective, it's gone as expected," he said. "We're still working though with the state Public Service Commission ... (to provide) information they are seeking about the transaction. That will be ongoing for the remainder of the year and possibly early next year."

According to the Public Service Commission's website, only four people have submitted letters objecting to the proposed takeover.

Commission Chairman Garry Brown said during a meeting in June that he wanted to know how much accountability Fortis will have for service to CH Energy's 300,000 electricity customers and 75,000 natural gas customers in eight Hudson Valley counties. He also asked Fortis and CH Energy to explain their administrative decision-making process and wanted to know whether Fortis will have "supremacy" over decisions.

Other commissioners wanted information about public benefits beyond those in the two years laid out by Fortis in the initial takeover plan, what employment reductions were possible, what was meant by statements that there would "expertise sharing" among CH Energy and other Fortis companies and what guidelines should be considered for foreign ownership of an American utility.

Fortis officials have said customer rates and CH Energy's employment numbers will not change during the first two years after the buyout, while CH officials have said Fortis will provide more than $20 million in customer benefits over five years once the transaction is approved.

Fortis, based in Newfoundland, reports having about 2 million natural gas customers in five Canadian provinces, two Caribbean countries, and upstate New York.